We talk about law firm development, management, and money metrics with Brooke Lively from Cathedral Capital.
Top 5 Reasons Why Lawyers Lose Money
Today’s Hot Take is from Americanbar.org,“Top 5 reasons Why Lawyers Lose Money,” by Gary Allen and Lynda Artesani. The reasons are:
“1 – Timekeeping
2 – Invoicing
3 – Retainers
4 – Choosing the wrong client
5 – Not hiring pros”
This article is coming at it from an accounting/book-keeping perspective, but the list could actually be applied more generally. We hear time and again how lawyers don’t have things a certain way or it’s different for law firms, but the reality is there are many parallels to other service-based businesses, and for some reason it’s not acknowledged.
The administrative side of running a business may not be the most exciting part of having your own law firm. In may cases it’s seen as a distraction from the real work of practicing law – and this is where the trouble starts. If you can’t get these business fundamentals down, get some kind of processes established, then you will get swallowed up by the bill paying and book-keeping. This is the business management equivalent of not seeing the forest because of the trees – except this is not seeing the money drifting away because you’re too busy going from task to task and putting out fires.
In poker, if you have a behavior or barrier that causes you to misplay hands, it’s called a “leak,” because you will leak money until you get it fixed. Same thing with this list – fix these leaks in your firm’s processes and you can take back the time and money you’ve earned.
“Everyone has a different definition of profit”
Brooke Lively is the President and Founder of Cathedral Capital, which specializes in helping entrepreneurs turn their companies into profitable businesses. Prior to consulting, Brooke was the full-charge administrator for a seven-figure small law firm which she helped to build from the ground up. Her 6 Key Numbers book series which includes, 6 Key Numbers Every Entrepreneur Should Know and 6 Key Numbers Every Psychologist Should Know is soon to be followed by an edition for Attorneys.
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